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June 25, 2010

(See attached file: PR 100625.pdf)(See attached file: PR 100625.xls)

  • Wheat futures traded lower this from harvest pressure and profit taking on gains made last week. Reports out of Kansas of better-than-expected protein levels in the HRW crop put greater pressure on the MGEX and KCBT markets. The MGEX July contract lost 26 cents on the week, closing at $5.12/bu, while KCBT nearbys lost 13 cents on the week, closing at $4.83/bu. Quality concerns in the SRW crop due to excessive rains provided some support to the CBOT contracts. CBOT nearbys were down only 5 cents on the week, closing at $4.56/bu. Favorable weather for the U.S. corn crop pressured prices, as CBOT corn nearbys fell every day this past week. CBOT corn closed on Friday at $3.40/bu, down 20 cents from last week. Soy nearbys were down 4 cents, closing at $9.57/bu.
  • The International Grains Council (IGC) increased their 2010/11 world wheat production estimate to 664 MMT, 4.0 MMT greater than last month’s estimate. The increase is due to a better outlook in the U.S., China, Australia, and Iran. The IGC reduced its Canadian production estimate by 2.0 MMT to 22.0 MMT due to delayed plantings. This would be a 17 percent decline from last year’s production. The IGC increased its world wheat consumption projection by 4.0 MMT, to 658 MMT, due to increased feed use.
  • Statistics Canada released their latest Field Crop report on Wednesday, placing western Canada’s 2010 all wheat seeded area at 21.6 million acres. However, the report is based on surveys taken between May 25 and June 3, prior to heavy rainfall in mid-June. The Canadian Wheat Board estimates western Canada’s seeded area at 19.2 million acres, 2.4 million acres less than Statistics Canada’s estimate.
  • Australian Crop Forecasters (ACF) estimated the 2010/11 Australian wheat crop at 90 percent planted on Monday, stating that plantings have picked up pace due to recent beneficial rains in Western Australia. ACF currently pegs 2010/11 Australian production at 22.5 MMT.
  • Protein levels in the HRW harvest have increased as the harvest advances north into Oklahoma and Kansas. Average HRW protein levels in the 2010 harvest are currently at 11.7 percent, compared to 11.5 percent a week ago. The better-than-expected protein levels have narrowed the price spread between Gulf HRW FOB 11.5 and 12.0 values, from 40 cents per bushel last week to 25 cents per bushel this week.
  • The Baltic Panamax Index climbed slightly from last week, closing Friday 65 points higher from a week ago, at 3,045. Maritime Research’s Grain Freight Index stood at 560.8 on Friday, its lowest point since mid-April. Maritime’s index stood at over a one-year high earlier this month, but the index has lost ground due to slowing demand for coal and iron ore in Asia.

File Name
PR 100625.pdf
PR 100625.xls
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